Thursday, November 12, 2015

First Time Homebuyer? Try Your State Housing Authority

One of the best kept secrets about mortgages is the great deals that
home buyers—especially first time home buyers—can get on a mortgage from
their state housing finance authority. In fact, according to a national
survey last year by NeighborWorks America 70% of U.S. adults are
unaware of down-payment assistance programs available for middle-income
homebuyers in their community.

State housing finance authorities are state-chartered organizations
established to help meet the affordable housing needs of their
residents. Most housing finance authorities (or HFAs) are independent
entities that operate under the direction of a board of directors
appointed by each state’s governor.

There are more than 2,400 programs available across the country from
state HFAs. For qualifying buyers, they offer first and second mortgages
at below market rates, down payment and closing cost assistance, grants
and credits to help with monthly mortgage payments, homeownership
education and more.

Borrowers with debt payments that are too high to qualify for a
conventional loan may be more successful with an HFA loan. Like FHAs,
HFAs are exempt from the new ability-to-pay rule that took effect last
year, known as the QM Rule.

In Connecticut, for instance, HFA loans are underwritten by approved
lenders. If you live in Connecticut (where, incidentally, Total Mortgage
is a participating lender) you should contact your loan officer to
learn more about the 38 programs available to home buyers and homeowners
from the Connecticut Housing Finance Authority. These include:

The Homebuyer Mortgage Program.
This is for first-time homebuyers (who have never purchased a home or
had an ownership interest in a residence in the past three years) who
meet minimum credit, income, and employment standards.

CHFA sets income limits for every town in the state based on local income levels and household size. See CHFA income limits to find out if you qualify.

Down Payment Assistance.

CHFA also offers loans up to $3000 for first-time buyer who have
difficulties raising the cash for down payments and closing costs.

Targeted Areas.

The Connecticut Housing Finance Authority (CHFA) suspends many of its
mortgage eligibility rules for homes purchased in areas of the state
targeted for revitalization. These “targeted areas” have been recognized
by the federal government as likely to benefit from an increase in
homeownership.

The cities of Bridgeport, Hartford (except for Census Tract 5245.02),
New Haven (except for Census Tract 3614.02), New London, and Waterbury
have been designated as targeted areas. Also, portions of Ansonia,
Danbury, Groton, Meriden, Middletown, New Britain, Norwalk, Norwich,
Stamford, Torrington and Windham have been designated as targeted areas.

HFA Preferred Loan Program for first-time home buyers who qualify for low cost mortgage insurance coverage

Homeownership Mortgage Program for eligible tenants of publicly assisted housing

Home Of Your Own Mortgage Program (HOYO) for disabled residents

Mobile/Manufactured Home Mortgage Program for those purchasing a mobile manufactured home in a state-licensed mobile home park.

Don’t Forget to Stay Educated

It’s important for new buyers to seek homeownership education. It’s
often a requirement for down payment programs and it gives buyers
confidence with the home buying process, financing options, including
down payment programs, and budgeting.

Take a moment to find out what’s available to you. Don’t assume you
won’t qualify. Millions in mortgage and down payment
assistance is available through state HFAs every year.